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Derivatives are usually leveraged devices, making it possible for traders to consider bullish (very long) or bearish (limited) positions value far more than the volume they have deposited as a margin at the trade. Leverage is a double-edged sword, magnifying each gains and losses. It also exposes traders to liquidations, or compelled unwinding, thanks to margin shortfalls. Additionally, mass liquidations normally guide to exaggerated bullish or bearish moves, so the better the use of leverage, the increased the probability of liquidations injecting volatility into the current market.
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